Construction continues on new homes at Sendero, the first of five key developments that starts selling at Rancho Mission Viejo this summer. In all, 14,000 homes are planned. JEFF COLLINS, ORANGE COUNTY REGISTER

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Grading equipment is readied to start construction on the second phase of the Rancho Mission Viejo "Ranch Plan," a 14,000-home development on one of Orange County's last frontiers. Construction on "Planning Area 2" will begin later this year. JEFF COLLINS, ORANGE COUNTY REGISTER

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The swimming pool at The Outpost, one of four clubhouses and community centers in Sendero. JEFF COLLINS, ORANGE COUNTY REGISTER

Workers prepare for Sendero's grand opening Saturday. The project, which will include 1,230 apartments and for-sale homes, is at Ortega Highway and Antonio Parkway. JEFF COLLINS, ORANGE COUNTY REGISTER

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Paul Johnson, Rancho Mission Viejo senior vice president for community development: "Knowing that it takes us 2½ years to get to market, you have to make a decision. Is the market getting better? Is the timing right? We took that risk." JEFF COLLINS, ORANGE COUNTY REGISTER

Sendero development highlights

•For sale: 940 houses and townhomes, including 285 in the gated Gavilan community for residents aged 55 and over.

•For rent: 290 apartments

•Amenities: Three clubhouses with pools, gyms, outdoor barbecue grills and patios; a community hall, a 15-acre community park and trails.

•Activities: Fitness classes, events, concerts and other activities will be funded with "transfer fees" paid each time a home resells. Combined transfer fees total 0.375 percent of the sale price, or $1,875 on the sale of a $500,000 home.

•Website: ranchomissionviejo.com

Ranch Plan highlights

Sendero is one segment of a larger project that includes five planning areas. Overall, the Ranch Plan includes:

•Land: 22,815 acres

•Open space: 17,023 acres

•Development: 5,800 acres

•Homes: 14,000 along Ortega Highway. Construction starts later this year on "Planning Area 2." Work starts next month the Cow Camp Road bridge, a 1,420-foot span connecting Sendero to Planning Area 2. It will be one of the longest non-freeway, non-tollway bridges in the county, said Mission Viejo Senior Vice President Paul Johnson.

After two decades of planning, delays, environmental battles and two housing busts, hundreds of new homes are hitting the market on one of Orange County's last frontiers.

Sales start Saturday at Rancho Mission Viejo's 940-home Sendero development, one of the county's biggest housing projects. The project is one of 40 O.C. housing communities launched just since fall.

"We are seeing a turnaround, a significant turnaround," said Russ Valone of MarketPoint Realty Advisors in San Diego. "Orange County has led the way in new project openings."

Sendero sits in unincorporated Orange County, just outside San Juan Capistrano near Ortega Highway and Antonio Parkway. The development is the first of five communities being built on the last 23,000 acres of the vast Rancho Mission Viejo homestead, which includes what is now Camp Pendleton, Mission Viejo, Rancho Santa Margarita and Ladera Ranch.

Environmentalists gave builders their blessing after developers agreed to shrink the project's footprint. About 17,000 of the ranch's last 23,000 acres will remain untouched.

The project's townhomes start at just over $300,000, and houses top out at close to $1 million.

The first homeowners are expected to move in as soon as August. When completed, the 14,000-home development will have about 35,000 residents, becoming perhaps Orange County's 35th city.

In an interview with the Register, Rancho Mission Viejo Senior Vice President Paul Johnson talked about the project's history, the development's target demographics and what comes next on the ranch.

Q. Why is Rancho Mission Viejo starting now?

A. Because we really took a look back in late 2010 and tried to ask when is this market going to recover. Knowing that it takes us 2½ years to get to market, you have to make a decision. Is the market getting better? Is the timing right? We took that risk, started to replan Sendero, and here we are.

Q. How did you determine the market would recover this year?

A. It was risky because nobody would say exactly that that was good timing. But the market's healed very well. It's not as robust as it was, but it will never be as robust as it was in the mid-2000s.

Q. Did you have to make any changes to your plans after the housing crash delayed construction?

A. We retooled. If we had moved along, we (would have) had a much larger product and square footage, which resulted in a much higher retail price. So we were over $1 million, and we really had expanded the development boundaries of (Sendero) to its maximum.

As we came out of the recession, it was really about bringing down the square footage, bringing down the retail price, reducing our development costs. So we downsized the development (boundary) to get to a more effective development scenario, and then that retooled all the product. Once you do that, you retool the whole plan. So we really essentially threw away what we did to get ready in '07 and restarted in '10 with a blank piece of paper.

Q. What was the cost of starting over?

A. It probably was a multimillion-dollar cost. ... It wasn't painless.

Q. Thirty percent of the new homes you're building in Sendero are for buyers age 55 and over. What role did demographics play in your planning?

A. The Gen Y's are the next emerging biggest demographic since the baby boomers came along. ... So the opportunity for what we're doing ... is to really meet the needs of the two biggest future buyer groups and make sure the area is being designed to meet their needs. If we do that well for the Gen Y's and the 55-plus (buyers), it works well for everyone. It automatically serves the broad spectrum of buyers if we're delivering the right homes at the right price.

When will Sendero be built out?

A. We expect to be absorbing 300 to 400 units a year, so we're going to be out of here somewhere mid- to late 2015. The market could get hotter, sales could get faster, so it's always a little unpredictable to guess that right on the dime.

You're planning to build 1,230 units in Sendero and almost 13,000 more units down the road as part of the overall Ranch Plan. When will you start the next phase?

A. We're already working on Planning Area 2 to begin construction late this year, with anticipation to bring it to a grand opening in late 2015. We start bridge construction and the grading (this year).

Q. You've previously said it will take 20 to 25 years for all 14,000 homes to be completed. Is that still realistic?

A. It's really going to depend on the economic cycles that we'll face, and all of the natural components of real estate development. If you could ever get to 1,000 units a year, it could be as short as 14 (years). That's not going to happen. We're not absorbing like we were in the 2000s.

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